According to a report by local news outlet Kommersant, the Russian Ministry of Finance has finalized a bill on crypto payments in the country. The document was obtained from the local news website and confirmed by two different sources.
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The draft law could finally bring clarity to citizens and Russian crypto investors regarding digital assets and digital mining. The document, titled “On Digital Current,” explores previously unexplored aspects of Russian regulation for this emerging asset class.
These aspects include the classification of the digital currency, the legal framework for its issuance and legal circulation in Russia, certifications, trading and more. As noted by Kommersant, Russian companies must obtain permission to trade cryptocurrencies and adhere to a strict identification process. The local media noted:
According to the draft law, digital currency can be accepted as a means of payment that is not the monetary unit of the Russian Federation, as well as an investment, and there should be no obligated person in relation to it.
Crypto platforms must maintain a minimum capital in order to offer their services in Russia. This amount is set at around $40,000 for exchange operators and over $100,000 for digital trading platforms.
These companies must approve a “strict” procedure to comply with Russian regulations, such as: B. Setting up separate entities, annual reports, internal controls and audits, full registrations with specialized Anti-Money Laundering (AML) companies and more.
In this sense, if a crypto exchange wants to offer its services in Russia and operate from the base, it needs to complete this process and get a license from an “authorized body” appointed by the Russian government. In addition, exchanges must tightly control their users’ data.
Russia will legalize crypto for payments. Surprise surprise.
— CZ 🔶 Binance (@cz_binance) April 15, 2022
Why Russia’s Crypto Payments Law Might Be Useless
The above might be cumbersome for small businesses and for the privacy of crypto investors in Russia. The data received from users must be preserved and updated daily.
As the bill clarifies, according to Kommersant, only Russian companies can apply to offer their services. In order for foreign exchanges to be licensed to operate, they would need to set up a business entity in Russia.
At the same time, Russian nationals are allowed to trade cryptocurrencies on international exchanges. Russian regulators seem to think their Know Your Customer (KYC) policies are enough to make their data available to local authorities. The media outlet added the following quote from Andrey Tugarin, Managing Partner at law firm GMT Legal:
It will be impossible to sell or buy digital currencies without an ID. The operator can only deposit and withdraw fiat currencies through banks through a bank account.
This bill appears to be a step in a good direction for crypto users in the country. However, you have raised concerns from Russian companies. Some believe the document fails to address key issues.
So people could bypass the law altogether and simply turn to international stock exchanges or the black market. Miners will have to go through a similar process to traders as Russia expects to create a national registry for the sector.
Related Reading | Russian Energy Minister Wants to Legalize Crypto Mining – Sanctions Harm the Country?
At the time of writing, Bitcoin (BTC) is trading at $40,400 with a 1% gain on the 4-hour chart.
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